After the last divi run debacle I'm considering the possibility we may have a good run this time.
1. On the conference call Gary practically promised the 1.25 div would be maintained in the near term.
2. The earnngs release on Friday resulted in a spectacular move on big volume.
3. The SP is just a bit above BV (31.64).
4. SPO is possible though not likely.
I'm considering Jan 30/32 calls. The longer term allows for a greater margin of error even thought the leverage is reduced.
I bought Jan 30 calls @ 2.52, Jan 35 calls @.26, and sold March 32 puts @.49.
After I bought MTGE announced a secondary. I think this dramatically increases the probability of a secondary in AGNC before EX. I believe that will be a great buying opp.
AGNC has established itself as one the better run Riets based on the last quarter report and the threat of a near term dividend cut has been all but eliminated. With any improvement in earnings next quarter a dividend increase could be likely.
Looking at last years trading range, before the threat of a dividend cut, I would think we would return to that trading area of $33 to $36. With $36 being close to the run peak and $33 being the low post ex dividend.
I just took a look at the price of Jan14 $30 call options. The bid/ask is $2.38 - $2.62. The share price is presently $32.39. Does that not mean that the time premium is virtually zero?
Does anyone know why that would be so?